Ilaria Mazzocco, a senior fellow at the Center for Strategic and International Studies (CSIS), discussed the rise of the Chinese electric vehicle (EV) industry and export trends.
In her testimony before the U.S.-China Economic and Security Review Commission, Mazzocco explained what these trends mean for the United States.
“Vehicles made in China are affordable and of increasing quality, making them attractive to consumers worldwide," Mazzocco testified on Aug. 21. "The cost of these vehicles could undermine production efforts underway in the United States and elsewhere as well as incumbent automotive companies," she said.
Mazzocco said EVs are transforming the automotive industry, and China’s recent rise has challenged leading companies and brought global tensions to the surface.
“China’s initiatives targeting the EV industry over the past 15 years are one of the most successful cases of industrial policy in the country’s recent history,” she said.
Due to government support, China has solidified its position as the largest EV market in the world, making up 60 percent of new vehicle registrations in 2022 and holding 40 percent of the global electric car supply. The majority of EVs sold in China are domestically produced, and more are continuing to be exported, she said.
Lithium battery manufacturing, a necessary part of EVs, is also controlled by China, she said. The International Energy Agency (IEA) said, according to her testimony, that China is responsible for 65 percent of battery production and 80 percent of cathode production. The U.S. Department of Energy estimates that the Chinese proportion is even greater than the IEA statistics report.
A price war is ongoing in the EV market, Mazzocco said. The price of a Tesla Model 3 in China has fallen by over $4,500 since January, while the Chinese company NIO reduced prices by $4,200 in June, she said. This has encouraged Chinese companies to expand globally, seeking opportunities in less saturated markets with lower levels of competition, she testified.
Mazzocco laid out a policy dilemma due to rising exports from China. She said that while manufacturing in China can cut costs and promote EV adoption, it might also impact advanced economies like the U.S. by jeopardizing job creation, thereby causing industrial decline. Mazzocco said delaying the EV transition or cutting incentives for U.S. automakers would be harmful, given the ongoing global shift, as would isolating the U.S. from competition.
She recommended that policymakers stimulate a diverse, competitive industry using incentives and innovation.
“Ultimately, policymakers will need to balance policies aimed at capturing greater shares of the economic benefits from decarbonization by incentivizing further domestic innovation without slowing the deployment of EVs and while maintaining a stable international system,” she said.
Mazzocco is a CSIS senior fellow, the organization's website says. She specializes in Chinese business and economics as part of the Trustee Chair. Her previous role was as a senior research associate at the Paulson Institute, where she led research on Chinese climate and energy policy at the institute's think tank, Macropolo.
She holds a Ph.D. from the Johns Hopkins School of Advanced International Studies (SAIS). Her doctoral work centered on Chinese industrial policy, particularly focusing on electric vehicle promotion and the role played by local governments, the CSIS website says. Also, she has master's degrees from both Johns Hopkins SAIS and Central European University and a bachelor's degree from Bard College.
